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Tips For Getting Out Of Debt On Your Own

Jul 4, 2008
Getting into serious is easier than ever. Fortunately, individuals who want to get out have lots of options and various sources of help available to them. Debt consolidation, credit counseling, and legal assistance are viable options. While drastic, bankruptcy is also a choice. Does this mean that outside help is required to escape debt?

People can in fact eliminate their debts independently, with no outside assistance. Though it does require certain measures of determination and willpower, many folks are surprised to learn that what they considered to be an overly tight budget is actually flexible enough to help them pay off debt.

How can I get out of debt on my own?

If you are deep into debt, getting out will require a well organized plan that can be stuck to firmly. Consider this example plan:

1. Stop accruing new debt. Put the credit cards away, and refrain from taking out new loans or refinancing old ones to borrow more money.

2. Create a budget. You need to know where your money is going each month, and in which areas you can cut back to free up more money to pay off your debts. If you're not sure where your money is going, write down all of your expenses for a month and then make your budget.

3. Remove unnecessary things from your budget while simultaneously reducing the amount you spent on everything. The money you save should be used for paying off debts.

4. Determine which debt needs to be paid off first. If you have secured debts other than a long-term mortgage, you may want to pay them off first. Debts with high interest should also take priority, unless you have lower interest credit cards that charge exorbitant annual or monthly fees.

5. Except for the debt you've set as your priority, pay just the minimum payment every month. Focus all your extra money on one debt and don't stop until it's gone. Any funds that unexpectedly come your way can help finish off such debts quickly, too.

6. When one debt is paid off, don't stop there. Move on to the next and don't give up until all have been dissolved.

Having a realistic view of finances can help you to get out of debt on your own, without help from any outside institutions. Eliminating debt in such a way helps improve bad credit or, if your credit is already good, keep it at a desirable level.
About the Author
Get an inside look at debt consolidation loans and other debt reduction strategies & how they can help fix bad credit, at Debtopedia.com. Visit http://www.debtopedia.com for more tips and to get a free copy of my report Secrets Of Credit Card Debt
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